Let’s talk about philanthropy

Finding greater purpose in the service of others

Are you considering ways to leave a legacy beyond your family, and do you see philanthropy – i.e. more strategic charitable giving – as a meaningful way to do so? Or are you younger and in a position to share your financial good fortune or inherited wealth in a way that helps you find greater purpose in life?

Regardless of your particular circumstances, the starting point for your philanthropy is a discussion with us about your values and the legacy you want to leave or impact you wish to make.

As Investment Advisors, we believe the discussion about your philanthropic plans is highly personal and should cover a broad range of topics at a deeper level: beyond the practical, this can include identifying the issues, priorities and beliefs that are important to you. It may also involve determining what constitutes positive impact or success and how this can be achieved through your philanthropic endeavors.

Philanthropy in the third act

Thoughtful, reflective and philosophical – these are qualities associated with many older adults and represent values that form the real basis of philanthropy. Having worked exceptionally hard, accumulated considerable wealth and established a comfortable way of life for your family and the next generation, you may be ready to shift your thinking from “what you have” to “who you are”. Strategic charitable giving may be a compelling way to bring this to life and make a meaningful difference to other people or causes.

Philanthropy in the second or first act

For younger philanthropists, including those from Generation X (born between 1965-1980) and Millennials (born 1981-1995), we recognize you may still be in your prime working years but have accumulated considerable wealth through exceptional success in business, the arts or sporting activities, or you’re involved in your family’s philanthropic ventures. We also recognize your propensity for involvement in good causes and ongoing charity.

How can we help?

Our role as your trusted advisory team is not to push or peddle a specific cause or charitable organization, but to provide guidance and our comprehensive experience, and put a structure in place that allows you and, if applicable, your family to realize your philanthropic hopes and dreams. This can be achieved as part of your larger wealth or financial plan in a tax-efficient manner.

Here are some of the key ways to structure your philanthropic efforts:

Donor Advised Fund

This is similar to a private charitable foundation but with significantly less cost and complexity. By establishing a Donor Advised Fund with a registered public foundation like BenefAction, you can name your foundation whatever you wish and manage all your charitable donations through one vehicle tailored to reflect your philanthropic goals and values. In simple terms, you can make irrevocable gifts – cash, securities, insurance, real estate, even private co. shares – to the fund. In exchange, you assume the role of advisor on the fund. First you decide on how the fund is initially invested and then you are able to recommend grants to your favourite charities.

Private foundation

Family members can make up the group of donors that set up and control a private foundation. It is a legal structure that usually takes the form of a corporation or trust. As a registered charity, a private foundation is exempt from paying income tax; furthermore, it can afford its donors special tax treatment for their contributions.

Endowment fund

Endowments may be an ideal gift to keep your vision alive long after you have passed away and pay lasting tribute to your passions or beliefs. These provide ongoing support to charities in perpetuity. The capital remains untouched, while the income generated is used to finance ongoing programmes and services. Naming privileges will associate you and your family with the endowment.

Testamentary trusts and bequests

These are charitable gifts left in your will that go into effect upon your death. It can also allow for income splitting among family members, protect your wealth from additional probate taxes payable on your death, ensure capital succession to your beneficiaries and provide greater protection against claims made against you, including matrimonial and creditor claims.

Securities, including mutual funds

Gifts of securities listed on a prescribed public exchange, as well as bonds, mutual fund units and shares, can be a strategic way to give. That’s because capital gains tax does not apply, allowing you to give more. A tax credit is based on the fair market value on the day ownership is transferred (typically the asset’s closing price).

Let’s start a conversation about philanthropy.

Contact us for an education article on charitable giving; or to discuss your queries and kickstart your plans.

BenefAction

BenefAction is a leader in helping Canadians make strategic giving an integral part of their wealth management plan. It focuses on streamlining the grant process and providing tools and support to help Benefactors and Advisors work together to accomplish philanthropic goals while minimizing tax implications.

It upholds the highest ethical standards and expects the same level of integrity and focus in each charitable organization it supports. It’s philosophy? “Doing the right thing, the right way: Giving conscious consumers the opportunity to create meaningful endowments for the causes they value most.”

BenefAction is a public foundation registered with the Charities Directorate of the Canada Revenue Agency (CRA). Benefaction is authorized to receive philanthropic donations, issue official donation receipts and make grants to registered charities and other qualified donees through the donor-advised funds and endowment funds it administers. Charitable Registration No. 80421 3759 RR0001.